Supporting black businesses as means to combat racism grows in momentum
The movement to support black businesses and entrepreneurs has gone viral.
As Black Lives Matter protests have spread across the nation, there has been an outpouring of support for black-owned businesses and restaurants. Many have seen significant increases in sales.
The death of George Floyd "just woke everyone up," Joel Prinz, co-owner of the Lighthouse Coffee Co., in Reno, Nevada, told ABC News.
The movement to support black businesses and entrepreneurs, as a means to combat racial injustices, has gone viral on social media, with hashtags, documents and consumer apps seeing their highest rate of traffic to date.
The app EatOkra, a nationwide guide to black-owned restaurants, has had 100,000 downloads this year -- 90,000 of them in the last 30 days.
"This isn't something we just jumped on because it's the thing to do right now, we have been doing this since 2016," Anthony Edwards Jr., the app's co-founder told ABC News. "I think people are coming to an understanding of the black experience, and what has really been going on in the world."
The team has been inundated with 5,000 new requests to be on the platform, and has now launched a crowdfunding campaign on Juneteenth to improve the app.
Black Wallet, another black-owned business directory platform, has also seen a tremendous increase in traffic.
"Over the past month, our website has had nearly 100,000 page views and we've received an additional 15,000 app downloads," app founder Jasmine Grant told ABC News.
Prinz said the revenues of his family owned business have increased 5 to 10% on a daily basis.The business was hit hard during the COVID-19 pandemic, however, he explained that the support of the community has saved the company from closing.
"It's not just black people helping black business owners, it's the whole community choosing to help black owned businesses," Prinz said.
Black-owned businesses have often faced greater challenges in establishing and growing their businesses, beginning with securing bank loans, capital and finding investors. Only 4.3% of the United States' 22.2 million business owners are black, according to a February 2020 Brookings Institute report. Data from J.P. Morgan Chase reveals that small businesses in predominantly black communities are rarely very profitable, with less than 1% having a median profit margin above 20%, as compared to nearly 40% of businesses in majority white communities.
Further, 95% of small businesses in mostly black communities hold a cash buffer of two weeks or less, making it difficult for them to keep their businesses going during economic downturns.
Such a small cash buffer becomes catastrophic when customers are staying home for a prolonged period. According to the National Bureau of Economic Research, the pandemic has had a devastating impact on black businesses, with 440,000 black-owned businesses, or 41% of the pre-COVID-19 numbers, closing their businesses, some permanently, as opposed to 17% of white-owned businesses.
Many minority businesses have had trouble accessing federal aid programs designed to help them remain afloat during the crisis, despite the fact that funds were set aside for them under the CARES Act. A survey of black and Latinx small businesses conducted by the Global Strategy Group determined that only about 12% of them had obtained the full money requested.
The expressions of support for small black-owned businesses, throughout the nation, have been welcomed with relief.
Nia Grace, owner of the restaurant Darryl's Corner Bar & Kitchen in Boston's South End, said "one of the best things" stemming from the protests, is that "we were able to see how much our community cares."
"There were a lot of people beforehand who said they supported small business and black business, and then after the protests, they decided to finally show it. It's one thing to say it, and then it's about what your actions look like," Grace said.
The restaurant has thrived since Grace took over the business in 2018. However, when the pandemic hit, revenues dropped precipitously, forcing her to lay off most of her staff.
Grace's focus has not just been on survival through coronavirus, she said, but also for the future of her business and that of other black entrepreneurs. Along with five black owners of restaurants and bars, she formed the Boston Black Hospitality Coalition to ensure that "black-owned restaurants and bars survive this period of economic hardship," urging that all those who could make a difference "do their part."
Grace hopes that her coalition will be able to help other black- and minority-owned businesses in the city not just survive, but thrive.
Supporting black-owned businesses helps not just the business, but the entire communities at the center of the current demonstrations. "Nine times out of 10, black owned businesses are making sure that people of color are employed as well," said Grace.
She asserts that buying from large retailers does not usually translate into benefits for the community: "Every time you buy food from a smaller, mom-and-pop shop or a restaurant, you know that it's a person who lives here, and all the money is going to be spent back here or another place in the neighborhood."
Several major U.S. companies are also pledging to combat systemic racism by donating funds to help small black businesses.
According to Tara Lewis, director of community at Yelp, the company saw a 35% increase in search frequency for black-owned businesses between May 7 and June 10. On Thursday, Yelp launched a free searchable attribute to provide businesses with a way to identify themselves as black-owned and make it easy for users to find and support black-owned businesses.
Google has announced the company will donate over $175 million to support black business owners, startup founders, job seekers and developers. Facebook followed suit on Thursday, after it committed $200 million to support black-owned businesses, as part of a $1.1 billion investment to support black and diverse suppliers and communities in the U.S by the end of 2021.
Similarly, Ramon Laguarta, chairman and CEO of PepsiCo, pledged $400 million over five years to strengthen local black-owned businesses, and Paypal announced a $530 million commitment to support black and minority-owned businesses and communities in the U.S.
"It feels like a change of the tides in terms of commitment to the small businesses in their own communities and the value they bring to neighborhood vibrancy. It is very exciting to see this channeled to also increase economic equality by supporting black- and brown-owned businesses," Dr. Jorge Guzman, assistant professor at the management division in Columbia Business School, told ABC News. "For now, the energy of the protests makes me think some of this momentum may be permanent."
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